“We are relieved to learn that Minister McCuaig-Boyd will finally release the Alberta Royalty Review Panel report later this week,” said Rick Fraser, Progressive Conservative Energy Critic and MLA for Calgary-South East. “It’s well past time for this government to show Albertans that it’s serious about stabilizing the economy."
Fraser would like to see several important exemption and benefit programs that provide drilling incentives for small- and mid-sized operators within in the current royalty regime, including the New Well Royalty Rate and the Natural Gas Deep Drilling Program, protected and expanded under the new system. These programs have encouraged a great deal of investment over the years, making it possible for smaller players to contribute in meaningful ways to the Alberta economy.
“We developed a number of levers to encourage unconventional oil and gas exploration which would have otherwise been unprofitable for these smaller outfits. If sub-$40 per barrel oil is to be the new normal for Alberta, these programs need to be enhanced. This could include reducing the royalty rate these operators pay or extending the length of time the reduced rate applies.”
Fraser also noted that while government does not control the price of oil, they do have a great deal of control over policy decisions that have a direct impact on the industry’s ability to compete with similar energy-producing jurisdictions. Royalty regimes play a key role in encouraging investment and enhancing competitiveness – both of which will be critical for Alberta’s energy sector going forward.
Cover image by Kurt Bauschardt - License